Google Reverses Q2 Slump In Q3 And Reports 14% Growth In Revenue

Facing the largest antitrust lawsuit in more than two decades as well as an escalating criticism against it of censorship, United States based search engine giant Google is currently doing well.

For the three months ending in September, a growth in revenue of 14 per cent year on year at $46.17 billion was reported by the tech giant’s parent company, Alphabet. The performance indicates the continued dominance of the company even in the face of multiple obstacles to its business.

The company also very comfortably beat estimates of analysts for net income for the third quarter at $11.2 billion. This resulted in a rise of 8 per cent in the shares of Alphabet in after-hours trading.

“We had a strong quarter, consistent with the broader online environment,” Sundar Pichai, CEO of Alphabet and Google, said in a statement. “It’s also a testament to the deep investments we’ve made in AI and other technologies.”

The third quarter performance of the company reflects a strong rebound of the company from its subdued performance in the previous quarter – a three month period after which the first revenue decline in history was reported by Alphabet with a reduction in online ad spending during the initial days of the novel coronavirus pandemic.

The company however reported an almost 10 per cent year on year growth in advertising revenues for Google in the third quarter of which search engine advertisement revenues grew at 6.5 per cent while a 32 per cent surge in ad revenues was reported for YouTube.

The blockbuster earnings “reflect broad based growth led by an increase in advertiser spend in Search and YouTube as well as continued strength in Google Cloud and Play,” Alphabet CFO Ruth Porat said in a statement.

“We remain focused on making the right investments to support long term sustainable value.”

Alphabet’s quarterly results was declared a day after US lawmakers grilled Pichai for hours – to0gether with the CEOs of Facebook and Twitter  – over moderation polices of the companies and allegations of political bias against them.

Saying that Alphabet approaches its work without political bias, “full stop”, Pichai defended his company’s handling of content.

“To do otherwise would be contrary to both our business interests and our mission, which compels us to make information accessible to every type of person, no matter where they live or what they believe,” he added.

An antitrust lawsuit filed just last week by the US Department of Justice last week is also a big problem for Google. That law suit is the largest such case against any tech company in over more than two decades when a similar case as filed against Microsoft. Google has tried to maintain its powerful position in the marketplace for online search and search advertising by muzzling competition, the US Justice Department has alleged in the law suit.

Criticizing the lawsuit as “deeply flawed”, the accusation has been refuted by Google.

“People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives,” Google’s Senior Vice President for Global Affairs, Kent Walker, wrote in a blog post.

During an earnings call, that sentiment was echoed by Pichai.

“We know our success in search is not guaranteed,” he said. “We are proud that people choose Google search, not because they have to, but because it’s helpful.”

(Adapted from CNN.com)

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